ChartSmith Trader's Blog

Trading futures on the road...

2011-11-11T09:30:00.000-08:00

Immersing ourselves in studies of the futures markets was a priority every day from the moment we crossed the California-Oregon border. Armed with our laptop and wireless air card there wasn’t a commodity price chart in existence that Shawna and I weren’t right on top of. This became daily habit as we traveled in our motorhome up through Oregon and into Washington. As we turned East across the top of the country two trades started coming into view.

The grain market prices in Chicago and Winnipeg had been trending down for quite some time but it was here that both the corn and canola markets began to drop off dramatically, reaching deep into thirty year historical lows. Our curiosity became insatiable as the market kept falling. Almost every day it would fall lower and we would say, “If it goes any lower the farmers will be giving it away!”

One day while chatting with our broker I mentioned that it would be great if we could visit with him and maybe even take a tour of his offices when we arrived in Chicago. We were only a couple of weeks out from arriving there and didn’t want to miss the chance to personally say hello. Andrew, with a hint of mystery in his voice, said, “let me call you back on that.” I suggested to Shawna half in jest that maybe our boy in Chicago didn’t have much of an office and was feeling a bit shy about us stopping by or worse, he didn’t have an office at all and had been working out of some hole-in-the-wall
apartment. Who could’ve known what was about to happen…

TWO BLOCKS DOWN

"Go confidently in the direction of your dreams" ~Henry David Thoreau

The next day while preparing to depart Kalispell, Montana, Andrew phoned. It seemed he had taken the liberty of making a phone call to a fellow friend and commodity trader to clear our family for a customized personal tour of one of the oldest financial district buildings in Chicago. Andrew had worked out the details to get us directly onto the trading floor of the Chicago Board of Trade. We would meet Andrew for a visit at his office and then take a short stroll to the “Board”. It was located two blocks down from Andrew’s brokerage office.

Our family was going to see a piece of American financial history. As we drove across the upper states drawing closer every few days to the Great Lakes we kept an even closer eye on corn and canola.

Chicago in fall seemed welcoming as the colors along Lake Michigan were beginning to turn. The White Sox had just won the World Series, and everywhere we looked there were cars with flags and banners waving for their team. The whole city seemed to be in celebration and we were excited to be there.

A DIFFERENT WORLD

An hour had scarcely passed from the time we first met Andrew at his office, walked down West Jackson Boulevard, and stepped through the street level doors of the famed Chicago Board of Trade Building. A moment later as we exited an elevator Andrew guided us to the exchange’s security counter. After receiving clearance the five of us proceeded up a set of escalators adorned with art deco sentinels to the twelfth floor—more security. The security guards had a brief exchange of dialogue with Andrew and our group stepped from large squares of granite flooring to the plush black carpet of the commodity exchange floor. A jolly fellow named Bill, dressed in a green jacket, an “I Love Lucy” tie, and a big smile, greeted us as our tour guide. He beckoned us into an adjacent room swelling with noise and activity.

Windowless, with amazingly tall ceilings and massive square footage, the room was primarily made up of dark muted colors. It was as if we had
entered an entirely different world—large circular stair-stepped areas, one
after another, beginning with a top rung two steps height up from floor level with steps flowing downward to about four feet under floor level at the bottom of each trading pit. There were hundreds of people standing in and around the large circles all at various levels of the pit steps.

Poised above and to the side of each pit sat an employee of the exchange, perched in what resembled a life guard’s chair, in front of a keyboard and small computer screen. Typing at an incessant pace, we were told this person had the responsibility of keeping in step with the most recent agreed upon price arrived at amongst traders in their respective pits. It was their job to enter open outcry data into their computer, streaming prices to huge lit boards located around the room’s four walls for everyone to see. Ultimately this price data would then be forwarded at the speed of light to the outside community of commodity investors around the globe.

*price data from the exchange is sold to thousands of investors, companies, and corporations at variable subscription rates, all of which depend on how quick they want to receive the data. The ancient adage holds true that time is money. For example, commodity hedge funds may pay thousands per month for “real-time” price data feeds, whereas an individual trader might choose to pay a more nominal subscription fee to have 20 minute delayed quote service.

On the floor Bill pointed out trading pits that included wheat, corn, soybeans, soybean meal, and soybean oil. Integrated into the rooms walls were live quote price boards brightly lit in yellow, green and red colors with numbers rolling at a jubilant pace. Standing with our backs to the wheat pit, Bill instructed us to turn around—at the top of the pit stood three people in all blue coats with bold red letters across their jacket backs. The letters read, “Kellogg’s”. We were told they were there to negotiate contract prices on wheat and other commodities relative to the production of cereal products.

As we walked the floor area encircling the pits Bill would play commentator to a rush of buying and selling that began at one side of the room and tell us what to watch for as the flurry of hand signals and yelling from traders would move from one trading pit to the next, like a wave affect. As a veteran commodity trader, our tour guide explained that as a rush of buy
orders came into one commodity pit it would often trigger a rush to buy or sell in neighboring pits, as they were all interrelated in various ways. The supply & demand issues driving price action in one commodity would influence others as well.

Leaving the rush of sound and flurry of hands Bill then walked Andrew and our family into an adjacent room, much the same size, used exclusively for trading financial futures contracts. It was here that we would meet people engaged in trading world currencies and indices. Buying and selling the British Pound, T-Bonds, or Eurodollars and others…As we looked out over the descending pits Bill suggested we watch one in particular. It was the Eurodollar options trading pit and just to the side of the pit on camera with his microphone, Rick Santelli of CNBC, was giving a live news update to the world.

On our way out Bill guided us back alongside the grain pits. As we took one last glance up at the electronic boards I couldn’t help but notice corn was down in price again…

LARGER VISION

“The greatest factor in any undertaking is one’s belief about it.”
~William James

The business of commodity trading was taking on a new reality—ten years of dabbling in the markets but it wasn’t until now, that I could truly say the commodity business felt real. This was true for all of us. Until this moment Shawna and I had studied our price charts each week. Our children had watched their mom and dad spending a few minutes here and there perusing the paper charts or computer generated charts, and on occasion they had even joined in on a conversation about the latest commodity news. But now it felt different for all of us.

As we thanked Andrew and departed the Windy City, reality was setting in—our moment of opportunity had arrived and we all could feel it. With new perception, our brief time at the Chicago Board of Trade brought clarity to our thoughts. Commodity investing wasn’t just a game anymore. It was big business.

From Chicago, our travels took us through hundreds of miles of corn fields. After a stop to say hello to friends in Peoria, Illinois we continued on to Louisville, Kentucky. Along the way there was even time for a visit to a farm with a corn maze. This was great for all of us; we all burned off some energy trying to find our way through an intricate corn field maze that had been created using a special GPS guided tractor. And on the business side we had a chance to talk with the farmer that owned the field and other fields in the area.

One day while in Louisville Shawna and I made the decision to fully commit to entering the corn market with an amount of funding that seemed substantial at the time. With a wire transfer request to our bank, the funds totaling $100,000 USD were moved to our commodity brokerage account in Chicago. The next call was to Andrew as we placed buy orders to layer in as the market continued its downward cycle.

For years we had been praying for this opportunity and here it was right in front of us as we reviewed price charts each evening. Corn continued drifting further into more than thirty year low prices. “How low can it go?” became a very real question as we began accumulating long positions. The market bottom had to be close because if it sank much further the farmers would be handing out free corn. The plan was to settle in as deep as we could and just sit tight—the market had to find its bottom soon at these low levels. If it meant staying in this trade for an entire year we were committed to doing it, and nothing was going to shake us.

Within a couple of months both the corn and canola markets had begun to flatten out. Further studies of the longest term price charts we could find validated our thoughts that commodity prices couldn’t stay there for long but would often act tired and lethargic before coming off a multi year bottom.

With a phone call to Andrew we found out he could enter trades for us on the Winnipeg Exchange in Canada. We decided to add canola to our portfolio. Having purchased all that our account could safely handle, it was down to two distinct things; corn & canola making their move and God granting us the patience to wait for it.

THE DREAM TAKES SHAPE

Then the month of March arrived. Spring had sprung and it was as if the grain market opened its eyes and decided to wake up. Shawna and I couldn’t wait to review our price charts at the end of each trading session.

Sometimes we wouldn’t even wait that long and there we would be, jumping at the chance to see what the market was doing during the trading session. The grain markets would be down one day, then up for three consecutive, back down and then rising up again. As we watched the market awake and the patterns develop it almost resembled the rhythm of musical notes.

Although the markets had drawn our account down to a low of $54,000 during the buying stages, in a matter of weeks corn and canola were bringing it all back. One week in early March, the account balance shot past its initial $100,000 starting balance like a rocket. Midway through the following week saw the account nearing $150,000.

Rendezvousing with family on a camping trip to a Northern Arizona state park a few weeks later culminated more gratitude for the commodity business. Enjoying a cup of coffee with my dad outside around the campfire one morning brought a nice surprise as Shawna came out of the motorhome to let me know that the grains had made another big move in the overnight electronic trading session. The commodity account was nearing $200,000 and the dream of full-time commodity investing was beginning to take shape.

(This post is an excerpt from ChartSmith-Forging Your Financial Future©, used by permission)

"The only way to true financial peace is to walk daily with the Prince of Peace, Jesus Christ"
– Dave Ramsey

Twenty years from now you will be more disappointed by the things that you didn’t do than by the ones you did do. So throw off the bowlines. Sail away from the safe harbor. Catch the trade winds in your sails. Explore. Dream. Discover.
- Mark Twain

Risk Disclaimer

In an effort to comply with CFTC regulations please be so kind and read our IMPORTANT NOTICE:

Futures and Options trading has large potential rewards, but also large potential risk. You must be aware of the risks and be willing to accept them in order to invest in the futures and options markets. According to many experts, most individual investors who trade commodity futures or options lose money. Don't trade with money you can't afford to lose. Nothing in our commodity futures workbook(s), workshop(s) or website(s) shall be deemed a solicitation or an offer to Buy/Sell futures and/or options. No representation is being made that any account will or is likely to achieve profits or losses similar to those discussed during the workshop(s) or on our site(s).

Also, the past performance of any trading methodology is not necessarily indicative of future results.

Furthermore, being a successful PAPER TRADER during one time period does not mean that you will make money when you actually invest during a later time period as market conditions constantly change.

In summary, when investing in futures and/or granting options you may lose more than the funds you invested. When investing in the purchase of options you may lose all of the money you invested

Eurodollars, The Perfect Storm?

2011-06-25T09:26:00.000-07:00

(Note: This article was written in May of 2009, and is now being republished for readers. Based on recent activity in the credit markets its' relevancy is taking on even greater importance . Also, to view the latest chart of Eurodollars go to http://tfc-charts.w2d.com/chart/ED/C1)

From time to time events unfold on the stage of history that drive market movement to extreme levels. Extremes in the futures markets create rare opportunities for the perfect storm—a storm that has the power to generate exponential profits with limited risk exposure. One such event has been taking shape for many months now.

With direct ties to short term interest rates, the Eurodollar has been making its’ move. Recently the financial market that correlates with the 3-month Libor interest rate has gained momentum as the push through 99 basis points has come to fruition. This week further explosive action moved the market closer to the 99 ½ area.

What does this mean for investors?

Simply put, the closer to 100 basis points—the less risk exposure for short positions.

The Eurodollar represents the U.S. Dollar in countries outside the U.S. Originally it was a dollar denominated deposit held in Europe, however, in modern day such deposits are held in many major countries around the globe.

Eurodollar prices can be very responsive to Federal Reserve policy and inflation. Interest rates falling will cause the Eurodollar to rise in price, and rising rates cause the Eurodollar to fall.

Eurodollar Futures

One Eurodollar contract gives you control of $1 million Eurodollars, and reflects the Libor rate for a 3 month, $1 million dollar deposit.

Eurodollar expirations are in March, June, September and December and are offered for trade almost 24 hours per day on the GLOBEX exchange.

Presently margin is $1,100 per contract. 1 point equals $25. This gives us a highly leveraged position in the marketplace, and that’s what we love about commodity futures investing—small amounts of investment capital influencing massive amounts of marketplace money.

Using the example of 99 basis points, when the U.S. short term interest rate falls to a 1% yield the Eurodollar will typically trade around the 99 area. 100 minus a 1% yield equals 99 basis points. This is the return investors can expect on deposits outside the country.

100 basis points acts as a ceiling; if Eurodollars were to move above 100 this would be the equivalent of taking out a loan from your local bank and the bank paying you interest on the money they lent…of course this wouldn’t make much sense for the bank.

As of this morning, May 22, 2009, risk to 100 per short contract amounts to less than $1,800. This is truly a rare opportunity and will only become better if/when the market moves closer to 100.

Velocity

Understanding the risk involved in any investment gives the trader a distinct advantage. Depending on your allocation of investment capital and your risk tolerance a choice might be to begin putting on short positions now.

A consideration, though, is to consider the possibility of how long interest rates will stay this low and how long Eurodollars will remain in the higher ranges. The fact that it’s nearing the upper range is, in my mind, not a strong enough reason to layer in short positions because of the possibility of the market remaining at this level for extended periods.

Velocity on our investment capital is something worth being mindful of.

Tools for Timing

Watch the tools for confirmation of a trend reversal. They can assist us in timing our entry efficiently and keep us from diving in too early.

From a technical chartist’s point of view, the Eurodollar market can be traded using the tools and indicators in precisely the opposite way we use them in a bottom-side-up market. The difference is we’re trading top-side-down so use your tools and indicators the same way you would normally but in the opposite direction.

Awareness Creates Opportunity

Americans spend countless hours watching the evening news, reading the papers, and catching updates via the web. But it’s our awareness of what is happening around us that opens the doors to potentiality in our lives. Boundless profit opportunities come and go; they have been for many years and will continue.

Will you take advantage of this wondrous profit opportunity or just wait for the next one? Either way, at very least be sure to paper trade the Eurodollar market as this trade setup comes into play. Then when history repeats itself, which it often does, you’ll be ready to fully benefit from its effects.

To your success!

*More information and details of how to use the three distinct confirmation tools & indicators for efficient entry timing can be found in the book, CHARTSMITH—Forging Your Financial Future.

Natural Market Rhythms

2011-06-25T09:04:00.000-07:00

Traders and merchants have for centuries used a seasonal approach to advantage in markets directly affected by such cycles. Those who prospered most anticipated best. Already realizing that price responds to supply and demand, they reasoned a step further: If cycles in nature create patterns in supply and demand, then perhaps those patterns generate price patterns. If so, the market's own natural rhythm can help one anticipate recurring price movements in the future.

Thus, the seasonal approach to markets is designed to help traders anticipate the timing and direction of future price movement. If one can find out how price tends to move at a given time of year, then one can prepare well in advance to take advantage of it doing so again in the future. Armed with knowledge of history, a trader can also better understand current market activity --- and act upon it rather just react to it.

Consider gasoline. Does the annual cycle of hot weather to cold and back to hot again affect supply and demand for it? When is consumption least and when is it greatest?... To read more on Natural Market Rhythms go to http://www.mrci.com/web/trading-articles/got-gas.html

Technical vs Fundamental

2011-05-17T16:28:00.000-07:00

Here's some thoughts on trading decisions based on technical vs fundamental...

Charts give us specific information needed for making actual trading decisions. Each day's trading range has incapsulated the opinion and emotion of the world's trading clientel--taking into consideration supply & demand issues and concerns, the vote has been cast and the open-high-low-and close tell the story without human emotion. The prices represented on the chart are what they are, plain and simple, and based on specific factors as described in ChartSmith-Forging Your Financial Future, we can create trading plans that place the odds of success in our favor while simultaneously reducing risk. That's the way we like it.

As for fundamental information, many of you have heard me call it "funny-mentals". The credit for that term goes to Mr. Ed Seykota of South Lake Tahoe. Funnymentals is a great description because this type of market information includes mostly ambitious opinions and emotionally driven sensationalized thoughts and ideas with sprinkles of factual data. Obviously this makes for a tough combination when trying to make sound trading decisions, not to mention attempting to stay committed to one's decisions. Like the legendary trader, Ted Warren, said in his book, How to Make the Stock Market Make Money for You, "...the trader (speculator) begins to run at the sight of his own shadow..."

Funnymentals are a part of the investing marketplace that coffeegirl and I find interesting and fun. This is why we love to include tidbits of recent news items along the way, keeping in mind that the fundamentals are more for entertainment than anything else.

Technical vs fundamental; now you know that we likem' both, but for two distinctly different reasons.

To your ongoing success, 52

Learn to let go of debt...

2010-10-30T07:09:00.000-07:00

This is not a game, ... Debt has become a part of who we are. It's become that spoiled child in the grocery store with their lip stuck out: 'I want it. I want it. I deserve it because I breathe air.' And, well, that's an uphill climb in our culture right now, to go against that and say, 'Hey, let's be grownups here. Let's be mature, learn to delay pleasure, save up and pay for things.'”
~Dave Ramsey

3 Sure-Fire Ways to Drain Your Trading Account

2010-08-16T19:42:00.001-07:00

According to the old adage, a fool and his money are quickly parted. The Fool Tarot Card captures the traditional idea of the fool. Three aspects of the fool are apparent. First, the Fool is staring off into space, unaware of his circumstances. Second, he is about to step off a cliff. Third, he is impeccably dressed in the finest manner. Symbolically, each represents a significant way in which the fool can be parted from his money. In today's world, acting like a fool is a sure-fire way to lose all of your money. In this article I've outlined 3.

1. Bet on Luck
The Fool was inexperienced and innocent. He did not understand what he was getting himself into. Because of his wide-eyed innocence, he is oblivious to the risks that he takes. Innocents are gullible and easily taken advantage of by more worldly individuals. A painting by Meissonier entitled, "A Game of Piquet," captures this. The faces of the innocents express puzzlement and uncertainty. They probably can't understand why they are being deprived of their funds.

Similarly, in the various markets, the small traders play against seasoned veterans. They do not understand how dangerous and risky the markets are. The novice reads some advertisement or newsletter explaining how easy it is to make quick profits in the markets, and he wants a piece of the action. He jumps in with both feet. There is no need to learn how the markets work. It's a waste of time and money! All he needs are some hot tips. This might work if you are lucky as Forrest Gump was. He started a shrimping business while knowing nothing about it, and he prospered thanks to Hurricane Carmen, which destroyed all his competition. His friend, Captain Dan, bought a stock, that happened to be Apple Computer, and made Forrest financially secure for the rest of his life.

Traders who depend upon such luck will find themselves with no funds in their accounts.

Do not enter the market unless you have studied the market, have a proven plan, and understand how and when it works. You need to enter with a plan that has a proper risk to reward ratio. One of the best ways to do this is to find a mentor, one who is an experienced trader from whom you can learn. Paper trade before committing actual funds.

And remember, it typically takes 10,000 hours to master any new skill.

2. Forget Your Plan
The Fool doesn't worry about money management. He steps into empty space without a parachute or a safety net. A safety net is for wimps and scaredy cats! He is so focused on making money that he neglects to develop a plan for when the trade moves against him.

In such cases, he can do one of 3 things.
• He can hang on hope, wishing for the trade to turn around while the losses continue to mount.
• He can take the macho attitude that, because he is a man, he can take these loses. So he takes them again and again until he blows out his account.
• Finally, he could employ simplistic and fatal risk management strategies. He doubles down when the trade moves against him. He does this again and again until his account is drained.

The disciplined application of proper position sizing, coupled with appropriate risk and money management rules, are essential for long-term survival in the market. Risk must be considered first and foremost. Control risk by using a percentage of your equity that you risk on any given trade. For example, 2%. Some newbies think they need to trade big or not at all. They believe that the more contracts they trade, the faster they will get rich. They trade more contracts than their account can handle, and end up zeroing out their accounts. Never counting winnings and losses while sitting at the table may work for Kenny Roger's Gambler, but it's not a good strategy for a trader, who needs to know where he stands in every trade

3. Follow the Crowd
Finally, the Fool is dressed in the latest fashion. He is part of the crowd. He spends as much time as possible on trading forums determining what everyone else is doing. There is no wisdom of crowds in the markets. The crowd might be correct for a while, but it is typically wrong at major turning points, because the crowd is emotionally driven. One reflects the opinion of another, who reflects the opinion of another, and so on until the house of cards where no firm foundation is built. Thus, the crowd gives back what it seemingly earned. Moving from one hot asset to another, because everything else is doing so, is just another way for a newbie to blow out his account.

A successful trader has to be self-reliant. He must access market information independently of the crowd, and all the talking heads in the financial media. He must assess the information for himself. He cannot dress up in the latest market fad, walk off a cliff, and expect to be successful.

Trade well and follow the trend, not the so-called "experts."

IF YOU WANT TO SEE THE ARTICLE WITH PICTURES PLEASE GO TO http://BLOG.SECRETSOFTRADERS.COM

Larry Levin trades the S&P 500 at the Chicago Board of Trade, now known as The CME Group; the world's largest and most diverse financial exchange. Levin is the Founder of Trading Advantage.com, a leading trading education firm specializing in empowering traders to achieve and surpass their financial goals. He appears regularly on CNBC, Fox Business News and other major media outlets worldwide. Contact Larry at 888-755-3846 or larry@tradingadvantage.com

Article Source: http://EzineArticles.com/?expert=Larry_M._Levin

Wall Street’s Gold Mine is Main Street’s Shaft

2010-08-07T14:13:00.000-07:00

by Sean Brodrick on August 6, 2010 at 8:30 am

Wall Street started this week off with another “push-it-higher” party, as the babbling heads on TV trumpet the latest good earnings news. Respected analysts at Cabot Market Letter just said it’s “likely” the Dow could surge to 14,000 in 2011. Meanwhile, many Americans are left wondering: How can it be party time for Wall Street when it’s such hard times for the rest of us? Where’s the party for Main Street?

I don’t have to tell you how bad things are in the real world. For example …

Private construction spending — down 62% from the peak!

ISM Manufacturing Index — close to stalling.

New home sales — worst June on record.

Factory orders have dropped twice in a row, down 1.2% June and 1.8% in May.

Unemployment is stubbornly high, and claims are starting to increase — again!

And California … ay-yi-yi! The bad news is that bankrupt state may start issuing IOUs this month. The worse news is California may be the canary in the coal mine for the other states, and struggling municipalities.
Heck, cash-strapped cities and counties across the U.S. have threatened to cut 500,000 jobs by 2012 if they don’t get help from the Federal government — and the strapped-for-cash government says help isn’t coming.

This is why many Americans are mystified and left wondering why the market can go up when the real economy is going down.

I completely understand. But I have to go with the trend of the market. And when the market buys good news … AND buys bad news … you really don’t want to stand in the way of that bus.

Let me show you five reasons why Wall Street is celebrating … and indeed, even higher prices may be down the road.

#1) U.S. Companies Make More Money Overseas. Earnings have topped estimates at 77% of S&P 500 companies that already reported results this quarter. So they must be making money somewhere, right? Bad news for Main Street — more and more of the earnings of U.S. companies comes from overseas and is not really dependent on Main Street’s economy.

U.S. companies have good reason to invest overseas — that’s where the growth is. Between them, the economies of China, India, Russia and Brazil account for 13% of world trade and have been responsible for about half of global growth since the start of the financial crisis in 2007, according to data from Goldman Sachs. The BRIC economies are expected to average 9% growth this year compared with 2.6% in advanced nations.

U.S. companies are earning more overseas than here at home.

#2) U.S. Companies Profit By Paying Less Taxes. What’s more, U.S. companies are paying less and less taxes on their foreign profits. As of the end of last year, U.S. companies amassed at least $1 trillion in foreign profits not taxed in the U.S. as of the end of last year, according to data compiled by Bloomberg. That cumulative total increased 70% over three years, from $590 billion in 2006. This is because more companies are using huge loopholes in the tax code … loopholes which Congress refuses to fix, and which at last count, cost the U.S. Treasury about $60 billion a year.

And the less companies have to pay in taxes, the bigger their profits.

#3) The rise in stock prices is relative … relative to the falling U.S. dollar, I mean. The once-mighty greenback has been sliding lower since early June, and the U.S. dollar and the stock market are on a see-saw of pain — when one goes up, the other often goes down. For example, in 2009, the S&P 500 rallied 68% from early March 2009 to late November. At the same time, the U.S. dollar slumped by 17%.

To be sure, the market and the dollar don’t have to move in opposite directions — they just do it a lot. That’s because the market is an asset priced in dollars. As the dollar falls, it takes more dollars to buy the market.

In extreme cases, you can get a Zimbabwe market. The Zimbabwe stock market rose 300,000% in 2007 as that country’s currency collapsed. I’m not saying that will happen — I’m saying that if your currency is going down, as the U.S. dollar is, the stock market has to go up just to keep its value.

#4) Bond yields are low … and stock yields are high. The yield on a 10-year note is now about 2.9%. And bond yields may not be done falling. Meanwhile, there are good, solid stocks that pay 4%, 5%, 6%, 7% or higher! Many investors need income, and there are some great high-yielding stocks out there … a strategy we’re putting to good use in Crisis Profit Hunter.

And heck, many dividend-paying stocks are so flush with cash they’re raising dividends. This is happening even in gold miners, which traditionally don’t pay great dividends. Two big names in the gold space, Newmont Mining and Barrick Gold, both recently raised their dividends.

#5) The Off shoring Trend Continues. Multinational companies with American names are eager to sell you products and take your money, but they’re just as happy to ship your job overseas. And this trend is accelerating. A 2008 Bureau of Labor Statistics report found that over 30 million (one-fifth) of service industry jobs were vulnerable to off shoring.

These aren’t just call-center jobs. Along with telemarketers and data entry, the BLS also included high-paying, highly skilled, knowledge work — scientists and engineers to architects and fashion designers, managers and business analysts.

The BLS study found that the at-risk service jobs were higher-paying ($61,473 vs. $41,610) and more highly skilled — more than half of them (54 percent) required college degrees and eight in 10 required “some college.”

When a corporation can pay someone in China 60 cents an hour to do your job, there’s no real competition. That’s one reason why I’m in favor of “fair-wage” tariffs on goods and services.

So, small businesses and Main Street should continue to get squeezed. And Wall Street gets to party with the money it’s saving.

Change We Can Believe In

While small businesses and Main Street continue to struggle, Wall Street is doing just fine.

The last election changed nothing. With few exceptions, President Obama has made the same policy decisions we might have expected from President McCain. No matter who wins, I don’t expect the next election to change anything either. Our “public servants” in Washington have been “captured” by Wall Street’s deep pockets. They’ll probably continue to shower their friends on Wall Street with gold, while sticking you with the shaft.

It’s time to change — it’s time to start looking out for yourself. The next time you get an urge to send a politician your hard-earned money, do yourself a favor and invest that cash in something real instead.

Here are three investment choices you might consider …

WisdomTree Dividend ex-Financials ETF, symbol DTN. This fund holds a broad swath of stocks in every sector but financials. It pays a 3.9% yield, and those payouts could rise as a host of companies are raising dividends. And dividends are one thing Wall Street can’t lie about.

Physical Gold and Silver. Wall Street and Washington consider gold a “barbarous relic” because they can’t control it, and gold’s continued outperformance shines the light of truth on the lies peddled in the corridors of power. Owning physical gold is an act of rebellion. Maybe it’s time you joined the revolution.

The Best Gold and Silver Stocks. You can buy individual stocks, and many of the best ones are tracked in the Market Vectors Gold Miners ETF (GDX). By the way, some of the miners in the GDX, like Barrick Gold (ABX) and Newmont Mining (NEM), are raising their dividends. Owning a gold miner that pays and is raising dividends is the best of both words — you’ll own a stock that pays you and you can ride what should be a great rally to come in gold.
One final word of warning: Like I said, I’m not standing in front of this bus as the market goes higher, but remember that the same kind of thing happened in 2007-2008. The economy went to heck and the markets still went higher … for a while. We know how that movie ended. This time around, consider taking shelter in stocks you don’t mind holding when the market goes lower (like companies paying secure dividends) or be ready to head for the exits.

Good luck, and good trades,

Sean

P.S. If you want to read my daily updates, check out my blog at http://blogs.uncommonwisdomdaily.com/red-hot-energy-and-gold/

This investment news is brought to you by Uncommon Wisdom. Uncommon Wisdom is a free daily investment newsletter from Weiss Research analysts offering the latest investing news and financial insights for the stock market, precious metals, natural resources, Asian and South American markets. From time to time, the authors of Uncommon Wisdom also cover other topics they feel can contribute to making you healthy, wealthy and wise. To view archives or subscribe, visit http://www.uncommonwisdomdaily.com.

Quick Market Snap-Recap

2010-07-18T08:32:00.000-07:00

Alright guys, another interesting week in the markets. I know there have been a lot of good things going on but there’s just a few I want to touch on this morning…

Lumber has begun another downward turn on the daily charts after this past two weeks “slight” price rebound. Check this out on tfc charts, a graphic chart of Lumber’s prices on a monthly basis; http://www.tfccharts.com/chart/LU/M for a broader view of what’s been happening.

Natural Gas has declined in recent days back into the channel we’ve been watching- could this be an opportunity to buy? Keep watching for signs of strength. And, seasonally NG has a tendency for firmer prices as we move into late summer and fall months.

Eurodollar has made a surprising recovery for the bulls rising back up to previous months high levels–All of us bears will have to be patient for now…

2010-07-07T05:57:00.000-07:00

The art of successful investing, like any other art, takes practice. This can be done through paper trading the markets that interest you. Have a great day!

Celebration of Freedom

2010-07-04T20:14:00.000-07:00

4th of July is a celebration of freedom we enjoy in our country. It is also a day of opportunity to honor those that have been so willing to give of themselves throughout the years in order that we can benefit from that freedom. Caring more for the future of others than the concern they have for their own- that's commitment, that's perseverance combined with vision...that, in my mind, is what has made this country rise above tyranny and become a country that people literally risk their lives trying to come to.

God Bless our men and women of the U.S. armed forces, and may your friends and family be blessed on this beautiful day.

Happy 4th of July friends, Scott

"The cost of freedom is love, the foundation of freedom is love." ~Pastor Frank Navarez, Emmanuel Fellowship

Short Selling the Futures Markets

2010-07-04T09:11:00.001-07:00

Since the stock market's dramatic sell off on May 6th, it has traded sideways to lower. The market has made new lows twice since then while each rally attempt has been capped by resistance roughly half way back to the top. Technically speaking, this is called consolidation and consolidation usually means continuation. The idea of an object in motion remaining in motion goes back as far as Isaac Newton and it still holds true to this day. This motion is what trends are made of and that is why consolidation is viewed as a pause in the existing trend's general direction and in this case, the trend is down.

Over the last two months of consolidation we've also seen volatility increase to the downside. There have been twice as many big down days as there have been big up days. The largest down day came as the result of June's monthly unemployment report, which resulted in a sell off of 4.5% to nearly 6%, depending on the stock index. Additionally, this month's unemployment report comes out Friday, July 2nd. The national rate currently stands at 9.7% while Ohio is full a percent higher at 10.7%. Furthermore, several leading economists feel that our unemployment situation has yet to peak. Finally, July through October is typically, the seasonally weakest period of the year for the stock markets.

Clearly, there are no guarantees as to the future direction of any market. However, it is unwise not to take into account the current weighting of pros and cons when making financial decisions. That being said, what actions are available to someone who has owned a stock like Cedar Fair for so long that the dividends and splits of the stock have left them with a cost basis of virtually nothing? Therefore, any sales of the stock would be subjected to substantial capital gains taxation. The typical response in this situation is one of helplessness. Just ride it out. The stock market comes and the stock market goes.

There is an active alternative to this feeling of habitual helplessness. That alternative is the calculated use of the futures markets. The construction of a futures contract is based on the agreement to either make or, take delivery of a given contract by the contract's future delivery date. This is the basis of the old cliché, "Where do you want your load of pigs?" The reality is that less than one percent of the futures contracts traded are ever delivered and those delivered, are by design. Every trade in the futures market requires a buyer and a seller. The usefulness of futures is that it doesn't matter how you initiate the trade. You can create a new position as either the buyer or, the seller and exit the trade prior to the delivery date thus, eliminating delivery issues.

Lets walk through a real world scenario using the Cedar Fair example above. The owner of the Cedar Fair stock wishes to protect their investment without having to pay the capital gains taxes on a lifetime or, generations of accumulation. Assuming the expectation of the stock market is lower, an appropriate amount of stock index futures can be sold to create a new position. This is called a short position and it makes money if the market declines in value. The portfolio has been protected by, "selling high." If the market does decline or, the perspective on the market changes, the futures trade is offset by buying back what has been sold. This is, "buying low." The cash difference between what has first been sold high and then covered by, buying low, is the profit accrued on the trade. This profit can be used to offset the loss in Cedar Fair on the broad market's decline.

This same strategy can be used to generate protection or, profit in any market that is expected to fall. These include agricultural contracts like corn, soybeans or, cattle and also include things like the U.S. Dollar or gold and silver. The commodity markets were designed from the beginning to be used as a tool to hedge risk. This tool is available and applicable to a wide range of individuals and their respective needs. The next time a market is expected to decline don't just sit there helplessly and watch the market value of your holdings - stocks, cash, precious metals, grains, etc. decline with it. Once educated, ignorance is no longer an excuse.

Andy Waldock
http://www.commodityandderivativeadv.com
http://www.cotsignals.com
866-990-0777

Article Source: http://EzineArticles.com/?expert=Andy_Waldock

Recommended reading for further insight into short selling:

The little Seattle based company that could

2010-07-03T17:11:00.000-07:00

Many of you know how we feel about the good folks at Jones Soda Co. We’ve been raving fans for a number of years now, love their soda and the quirky approach to marketing, even travelled to Seattle to tour their headquarters a few years back.

Looks like their in the news again, as always it will be interesting to see where their next steps take them…Scott

Press Release, June 29, 2010

Seattle Seahawks, Jones Soda Co. End Sponsorship Partnership

RENTON, Wash. – The Seattle Seahawks and Jones Soda Co., today announced the two companies have opted not to continue their sponsorship relationship, which enabled Jones Soda to exclusively provide carbonated beverages at Qwest Field. This announcement ends a positive three-year relationship between the two organizations.

“The Seahawks partnership was great for Jones Soda providing brand awareness, retail activation and involvement with one of the elite NFL franchises,” said William Meissner, Chief Executive Officer of Jones Soda. “Collectively, the team at Jones are huge fans of our hometown Hawks…
Read the complete article

Futures Watch

2010-06-24T05:28:00.001-07:00

A few markets I want to touch on; Canola, Lumber, and Natural Gas.

Canola has been under the $400/Ton price mark for a few months until its recent awakening. We’ve been keeping a close eye on this and it’s looking great- congrats to you if you’re already on board. Also, don’t forget to keep some stops in place to secure profits on the way up. For those of you that preferred to wait for a bit more confirmation of a bull move, this may not be completely underway yet…let’s give it some time to see if there’s a pullback to the $400 area- this could prove to be an excellent buying opportunity…

Lumber; alrightyyyy-thennnn!!! Is this a crazy market or what? It just keeps sinking lower, and I’m sure much of this is due to the marketplace understanding the reality of the lackluster demand for housing. As I mentioned a week ago, this fiber futures is slipping deeper into the Low Zone…

Natural Gas has sagged back toward the top of the channel. Could this be an excellent buying opportunity? I’d like to think so!!! But first, do your homework; review the charts-daily, weekly, and monthly, and look at its seasonal tendencies too. After the research is complete, as outlined in our book, Building Wealth Through Commodity Futures Trading, start planning out how you’re going to trade this market. You can do this even if you’re just going to paper trade Natural Gas as well.

Happy trading! Scott

PS: More on the Eurodollar market coming up next! S

Fiber futures "lumbers" into wholesale zone

2010-06-11T19:06:00.000-07:00

The September Lumber contract continued its slide this week with the daily chart prices touching back into the lower third region.

Further study revealed the weekly and monthly charts are in agreement as well- this is great news friends, as incredible opportunities always show their face when markets get into what we call the "wholesale zone"!

Enjoy the weekend and study the charts, Scott

Visualization of $100 Million compared to the entire US Budget

2010-06-03T22:15:00.001-07:00

Our dear friends in Minnesota recently shared this with us;

It’s very hard to visualize the size of the US budget.
Recently Pres Obama announced that he is going to cut 100-Million dollars of spending out of the US Budget. This short video will enable you to visualize how much of the budget $100 Million represents.
Click here:

Visualizing Obama’s budget cuts.. [VIDEO]

Quote of the day

2010-06-03T22:12:00.000-07:00

You are what you spend 95% of your time thinking you are. ~Tony Little

I love that quote! Tony happens to be a fitness trainer but on so many levels I think it applies to EVERY area of a person’s life… Scott Jones

A Day of Remembrance

2010-05-31T08:43:00.000-07:00

Memorial Day, a day of remembering those men and women serving in the armed forces that have given their lives in war. Today is also a time to honor those that have fought and those that are still fighting for our freedom.

As I sifted through some Memorial Day photos this morning I came across one I would like to share- the photo is beautiful and the caption, in one fell-sweep, says it all- remember
view the photo @ http://riversongs.wordpress.com

SPECIAL REPORT: EURODOLLARS--the Perfect Storm?

2010-05-29T23:18:00.000-07:00

I wrote this Special Report for www.mychartsmith.com last year. We've been enjoying the Eurodollar market the last few weeks and many of you have benefitted from the recent short play but now we have a shot at doing it again! With that said, I'm re-posting this for those that may have missed it and I hope it inspires you to keep an eye on this fantastic global market. Our best to you this Memorial Day weekend, Scott

May 2009

From time to time events unfold on the stage of history that drives market movement to extreme levels. Extremes in the futures markets create rare opportunities for the perfect storm—a storm that has the power to generate exponential profits with limited risk exposure. One such event has been taking shape for many months now.

With direct ties to short term interest rates, the Eurodollar has been making its’ move. Recently the financial market that correlates with the 3-month Libor interest rate has gained momentum as the push through 99 basis points has come to fruition. This week further explosive action moved the market closer to the 99 ½ area.

What does this mean for investors?

Simply put, the closer to 100 basis points—the less risk exposure for short positions.

The Eurodollar represents the U.S. Dollar in countries outside the U.S. Originally it was a dollar denominated deposit held in Europe, however, in modern day such deposits are held in many major countries around the globe.

Eurodollar prices can be very responsive to Federal Reserve policy and inflation. Interest rates falling will cause the Eurodollar to rise in price, and rising rates cause the Eurodollar to fall.

Eurodollar Futures

One Eurodollar contract gives you control of $1 million Eurodollars, and reflects the Libor rate for a 3 month, $1 million dollar deposit.

Eurodollar expirations are in March, June, September and December and are offered for trade almost 24 hours per day on the GLOBEX exchange.

Presently margin is $1,100 per contract. 1 point equals $25. This gives us a highly leveraged position in the marketplace, and that’s what we love about commodity futures investing—small amounts of investment capital influencing massive amounts of marketplace money.

Using the example of 99 basis points, when the U.S. short term interest rate falls to a 1% yield the Eurodollar will typically trade around the 99 area. 100 minus a 1% yield equals 99 basis points. This is the return investors can expect on deposits outside the country.

100 basis points acts as a ceiling; if Eurodollars were to move above 100 this would be the equivalent of taking out a loan from your local bank and the bank paying you interest on the money they lent…of course this wouldn’t make much sense for the bank.

As of this morning, May 22, 2009, risk to 100 per short contract amounts to less than $1,800. This is truly a rare opportunity and will only become better if/when the market moves closer to 100.

Velocity

Understanding the risk involved in any investment gives the trader a distinct advantage. Depending on your allocation of investment capital and your risk tolerance a choice might be to begin putting on short positions now.

A consideration, though, is to consider the possibility of how long interest rates will stay this low and how long Eurodollars will remain in the higher ranges. The fact that it’s nearing the upper range is, in my mind, not a strong enough reason to layer in short positions because of the possibility of the market remaining at this level for extended periods.

Velocity on our investment capital is something worth being mindful of.

Tools for Timing

Watch the tools for confirmation of a trend reversal. They can assist us in timing our entry efficiently and keep us from diving in too early.

From a technical chartist’s point of view, the Eurodollar market can be traded using the tools and indicators in precisely the opposite way we use them in a bottom-side-up market. The difference is we’re trading top-side-down so use your tools and indicators the same way you would normally but in the opposite direction.

Awareness Creates Opportunity

Americans spend countless hours watching the evening news, reading the papers, and catching updates via the web. But it’s our awareness of what is happening around us that opens the doors to potentiality in our lives. Boundless profit opportunities come and go; they have been for many years and will continue.

Will you take advantage of this wondrous profit opportunity or just wait for the next one? Either way, at very least be sure to paper trade the Eurodollar market as this trade setup comes into play. Then when history repeats itself, which it often does, you’ll be ready to fully benefit from its effects.

100% Return Inspires Traders

2010-05-24T20:59:00.000-07:00

September Eurodollars continued the downward trajectory today. This, I’m sure, has been an enjoyable trade for many of you.

It’s one thing to accept profits but sometimes the market just accelerates in our direction leaving us stunned…even inspired. This has been one of those trades, a trade I had “guessed” could take a few months- then just a week and a half after the short sale entry accumulated profits are at a kind 100% cash-on-cash return…

…remember to adjust stops down as we move in to the support area made in late Dec. of 2009. Getting stopped out at this stage isn’t all bad when you consider that a bounce back to recent highs could be a clean setup for another round of shorts. Just food for thought.

Watch the tools and support/resistance levels. And, congratulations on a great trade friends!

Blessings to you, Scott

Technical vs Fundamental

2010-05-16T09:44:00.000-07:00

On the ChartSmith Trader's Blog we have included fundamental news and information on various commodities, however, when it comes to actual trading decisions our decisions are primarily based on technical chart data.

Here's some thoughts on technical vs fundamental...

Charts give us the up-to-the-day information needed for making actual trading decisions. Each day's trading range has incapsulated the opinion and emotion of the world's trading clientel--taking into consideration supply & demand issues and concerns, the vote has been cast and the open-high-low-and close tell the story without human emotion. The prices represented on the chart are what they are, plain and simple, and based on specific factors as described in ChartSmith-Forging Your Financial Future, we can create trading plans that place the odds of success greatly in our favor while simultaneously reducing risk. That's the way we like it.

As for fundamental information, many of you have heard me call it "funny-mentals". The credit for that term goes to Mr. Ed Seykota of South Lake Tahoe. Funnymentals is a great description because this type of market information includes mostly ambitious opinions and emotionally driven sensationalized thoughts and ideas with sprinkles of factual data. Obviously this makes for a tough combination when trying to make sound trading decisions, not to mention attempting to stay committed to one's decisions. Like the legendary trader, Ted Warren, said in his book, How to Make the Stock Market Make Money for You, "...the trader (speculator) begins to run at the sight of his own shadow..."

Funnymentals are a part of the investing marketplace that Shawna and I find interesting and fun. This is why we love to include tidbits of recent news items along the way, keeping in mind that the fundamentals are more for entertainment than anything else.

Technical vs fundamental; now you know that we likem' both, but for two distinctly different reasons.

To your ongoing success (and fun!), Scott

Secret Door to Success

2010-05-16T09:33:00.001-07:00

In her book, The Secret Door to Success, Florence Scovel Shinn wrote;

...imagination is man's workshop, the scissors of the mind, where he is constantly cutting out the events of his life!

Although I've read her books many times I often enjoy rereading them--if only to revisit the little jems of wisdom she so amazingly shared with people back in the 1920's and 30's.

Good day to you and yours!!! Scott

Mother's Day Wish

2010-05-09T12:39:00.001-07:00

Our kindest wishes to all of you dear moms and moms-to-be. Happy Mother’s Day!

“God could not be everywhere, and therefore he made mothers.” ~Rudyard Kipling

Reminiscences of a Stock Operator, not just for stock traders...

2010-05-08T13:27:00.000-07:00

Reminiscences of a Stock Operator by Edwin Lefevre is a book usually read at least once a year by professional traders. Although first published in 1923, most of what is written still holds true in today's stock and commodity markets.

A fictitious book based on the trading life of "Lawrence Livingston" was inspired by the real life speculator Jesse Livermore; one of the most famous U.S. stock traders of all time. Jesse was known for his rise from common office boy to Wall Street legend. Reminiscences focuses on Jesse Livermore's basic trading rules and the general psychology of a market speculator.

Reading this book always inspires me to have a plan in my trading, to follow my own knowledge of the markets, and to not be afraid to admit when I am wrong. It also shows me that with time, dedication, and a love for trading one can take a small amount of "line" and turn it into a fortune.

Quote for the Day

2010-04-21T17:32:00.000-07:00

Your mental attitude is the most dependable key to your personality.
~Napoleon Hill

Debt is NOT a way of Life!

2010-04-12T20:36:00.000-07:00

Here's an email update we recently received from Zane Anderson Ministries. I believe Pastor Zane is hitting on a subject that touches every household in America- that being the way we view DEBT and the way DEBT is controlling us...I firmly believe that if Americans were to embrace financial principles on a biblically based level a lot of families would begin to see rays of hope streaming back into their lives. And for all of us that trade commodity futures this holds immense value too- so please read on! Scott

Debt is NOT a way of Life!

The rich rule over the poor, and the borrower is servant to the lender.
Proverbs 22:7 NASB

Our generation has been seduced by a spirit of mammon that manipulates our attitudes and beliefs about money. Debt is not a way of life. Our culture says whatever it is that you want, you've got to have it now! Credit card companies won't tell you that you could have ten of those things you bought for the price you paid on credit for one. If you have a credit card with a $10,000 balance, which happens be what the average American has these days, and you're paying the minimum, in most cases you'll never get it paid off. For one reason, what you pay off, you add back on to the card.

I know people who put a second mortgage on their home so they can have a nice vacation or a new car. It's time to break the mindset that comes with an inability for delayed gratification.

Proverbs 22:7 says if you owe, then your debtor owns you. You become a slave to your debt. (More...)

Trading 'movie futures' like pork bellies? MPAA fights the idea.

2010-03-29T21:41:00.000-07:00

We just found this article on the web--hmm, interesting...

Los Angeles

Two firms want to turn America’s growing obsession with how much money movies make into a full-blown futures exchange through which investors can peculate on Hollywood profits and losses, much as traditional commodities markets offer wagers on the future prices of pork bellies and orange juice.

The two exchanges – one from New York, another based in Chicago – hope to gain approval and open for investors in April. But they have run into a ferocious hailstorm of protest, some from the very folks the financial firms say they hope to benefit, first and foremost – the six major movie studios.

“The reputation and integrity of our industry could be tarnished by allowing trading in the movie futures contracts...More

By Gloria Goodale, Staff writer, Daniel B. Wood, Staff writer / March 29, 2010 The Christian Science Monitor, CSMonitor.com

The Anatomy of a Trade Setup

2010-03-28T11:58:00.000-07:00

I just received this from our trading coach, Jim Prince. Don't make another trade without first checking this out! ~Scott

In this week's Training Video I spend nearly ten minutes walking through the anatomy of a trade setup.

What is the anatomy of a trade setup? Quite simply it involves choosing an entry, stop and target price for the market in question.

In addition, we must consider the risk vs reward once we've determined the three prices above. Once you've completed these steps then you can determine whether or not the setup is right for you based primarily on the risk vs reward.

If the risk is too great, the setup may be one you wish to pass on!

To view the online Training Video go to The Greatest Business on Earth!

Trading Psychology - Ace Your Trading

2010-03-28T11:40:00.000-07:00

Sometimes, a light will shine on trading psychology in the most unusual way...

This morning, I mentioned to my wife that today is my sister's birthday. That threw her into a minor panic. We had forgotten! No gift, no card.

Rather than focusing on the things she planned to accomplish, a good part of the morning was spent figuring out a gift, getting it, making arrangements to have it sent, etc.

At the end of all this, my wife asked me, "When is your mother's birthday?"

"That's months away, why?" I asked.

"Because we are going to ACE this," she replied.

ACE? Intrigued, I began to learn about the ACE process.

You see, my wife works for one of the largest corporations on the planet, and ACE - Achieving Competitive Excellence - is their continuous improvement operating system. It works incredibly well and can be easily adapted to trading.

A fundamental idea of ACE is to have an uneventful day. Eventful days are to be avoided. Events cause disruption to the normal day and workflow. They divert your attention, create stress, and keep you from getting your tasks done. Events create crises. This is why my wife asked for my mother's birth date. When an event occurs, you should figure out how not to have that event again. You make a plan. It's the process of continuous learning and improvement. You learn from the event so that you can avoid the same event from recurring the next time. Very smart thinking.

Traders can adopt ACE thinking and improve their trading process. One simple ACE action traders can do is to have a plan when coming into the market. A daily plan gives you a framework to help understand the next day's market action. You lay out the market structure the night before and watch how the market trades around that structure the next day. Even if the market does something different, your plan gives you a reference. If the market trades differently from what you think it would, that itself can be significant.

Not having a plan is a sure way to cause 'events' in your trading. Wondering, for example, where weekly support is located in the middle of trading is a sure way to cause an event. You can easily imagine how not being prepared can wreck havoc on your trading: diverted attention, increased stress, erratic trading behavior, trading errors, lost profits, lost capital.

Of course, even with a plan, you will still have events from time to time. When an event occurs, think through how not to have that event again in the future. Then, take whatever steps are needed to put your correction in place. Often, the corrective action will become part of your daily plan or your overall trading plan. This is continuous improvement in action, and it leads to better trading.

So, ACE your trading! Avoid events by being prepared with a daily plan and take corrective action for those events that do occur. It helps you keep your trading and your trading psychology on an even keel.

You can learn how to ACE your trading with my video tutorial Keeping An Effective Trading Journal, which includes detailed explanations on how to make your Daily Plan for trading the next day. http://www.tradingpsychologyedge.com/m7_view_item.html?m7:item=Trading%20Psychology%20%231.

You will get a video download and a comprehensive Trading Journal Workbook, along with detailed examples on you can use the Trading Journal to improve your trading each and every day.

From - Dr. Gary Dayton - TradingPsychologyEdge.com
Article Source: http://EzineArticles.com/?expert=Gary_Dayton,_Psy._D.

What is the Key to Success?

2010-03-26T18:45:00.000-07:00

Learning anything, including commodity futures trading, can be accomplished through perseverance and effort.

If a person struggles with an investment concept, with practice the concept will become easier.

Through perseverance and effort, struggles become challenges and challenges become energizing because we begin to understand that intelligence is developed through hard work.

What most call genius or talent was at first a seed of curiosity that was cultivated over time through tremendous and sustained effort. Remember the addage, a
successful person is born of a little inspiration and a lot of perspiration?

Carol S. Dweck, in Scientific American (Nov. 07) states that "more than three decades of research shows that a focus on effort - not on intelligence or ability, is the key to success...in life."

To your fabulous future and expanding success! Scott

The Financial Matrix

2010-03-21T20:57:00.000-07:00

(Although this write up is from a few months back it's astonishing none-the-less. Even more reason for people to get their finances on the fast track!)

I fell for it. I fell for Goldman Sachs' bait and switch: the lowering of its GDP estimate thus setting up a bear trap for today. It was either that or too many people were catching on to the sweetheart deal Goldman customers were receiving, or Tax-Cheatin-Timmy at the Treasury threw Hatzius a curve ball. Now that Hatzius was (finally) wrong - as in way off - with his revision, the Treasury/Goldman inside-information shuffling con game can continue.

I have not lived in The Matrix for many years now; however, I slipped into it yesterday. For those of you who haven't seen the movie "The Matrix," it was a film describing a future in which reality perceived by humans is actually the Matrix: a simulated reality created by sentient machines in order to pacify and subdue the human population while their bodies' heat and electrical activity are used as an energy source.

Most Americans live deep inside The Financial Matrix: a simulated reality created by Fraud Street propaganda in order to pacify and subdue the human population while their bank accounts are drained due to their inability to think for themselves, which is used as an energy source to grow.

Today's GDP data is a perfect case scenario. The American masses were told the GDP showed 3.5% annualized growth and all was well. In fact, it was better than well; it was Nirvana. The folks trapped inside the lies of The Financial Matrix were happy as they swallowed their blue pills en masse. Some of us prefer reality - the red pill.

Reality is much different. A huge portion of the so-called growth came from government's charade known as "Cash for Clunkers." I called this "Cash for Foreigners" at the time since 4 of the top 5 sellers in this tax heist were foreign brands. Moreover, the government earns nothing so it has NO money to give; it must be stolen from group A to give to group B. This swindle added 1.66% points to the third-quarter change in real GDP after adding just 0.19% point to the second-quarter change.
Which is real? Which is the Financial Matrix? The answer is clear to all who took the red pill!

Personal income decreased $15.5 billion (0.5%) in the third quarter, in contrast to an increase of $19.1 billion (0.6%) in the second. Current taxes increased $4.8 billion in the third quarter, in contrast to a decrease of $119.1 billion in the second. Umm, isn't this backwards: taxes up and income down? How is this good for the economy?

What is left of ones income after paying his taxes is known as ones disposable personal income. This decreased $20.4 billion (0.7%) in the third quarter, in contrast to an increase of $138.2 billion (5.2%) in the second. In the Financial Matrix this doesn't matter and is never discussed on the Matrix-run financial shows. However, this is really bad news.

The government gave away trillions of dollars yet disposable income is down? Jobs are still dreadfully weak? The only reason GDP rose is wasteful government spending, cash-for-foreigners and the current excessive housing tax credits whose effect will diminish soon even though the program was just extended.

In other news that was magically stifled today was the news of more bailouts. Yes, MORE BAILOUTS! GMAC, the financing arm of Government Motors, is tapping the Treasury for its third bailout. This time GMAC has its hat in hand for an additional $2 to $5 billion. AIG is also holding up the Treasury (read: taxpayer) for an additional $2 billion.

In my humble opinion, GM/GMAC and AIG have the equivalent chance of repaying this debt as a snowball's chance in hell. The government and Fraud Street know this yet they ask for, and receive, more and more money.

If you didn't know any of this it is because you live in The Financial Matrix. Do yourself a favor and unplug - take the red pill like Neo did in the film and see the financial market for the ugly reality that it truly is.

Trade well and follow the trend, not the so-called "experts."

Larry Levin
Secrets of Traders
The Chicago Board of Trading Building
141 W Jackson Blvd. Chicago, IL 60604
888-755-3846
312-235-2572
info@secretsoftraders.com

Global Investor

2010-03-21T20:44:00.000-07:00

The Adventure Capitalist and Investment Biker, Jim Rogers,
speaks out on commodities...

James Rogers, Jr. was a co-founder, along with George Soros, of the Quantum Fund,
and is a college professor, author, world traveler, economic commentator, and
creator of the Rogers International Commodities Index (RICI).

Why the "Rich Get Richer"

2010-03-09T20:00:00.000-08:00

We've enjoyed Robert Kiyosaki's books over the past couple of years. Here's a tidbit of Mr. Kiyosaki's financial wisdom;

The rich build assets that they use to purchase other assets. The poor only have expenses. – Robert Kiyosaki

How To Profit On Future Contracts You Don't Own

2010-02-28T20:26:00.000-08:00

By Brad Sherwood

What if you were a real estate investor, and you believed that you could find a buyer within a short period of time who will pay $120,000 for a property that you can buy for only $100,000? You could buy the property outright, using your own financing, and then sell when you found the buyer. But then you'd have to make payments, pay the bills, manage the property and take money out of your pocket.

But did you know that you can own the exclusive right to pay no more than $100,000 - or any price YOU agree on - for a set period of time? Then if you can find the buyer in the meantime who will pay you $120,000, you would simply exercise your right to pay only $100,000 for it, turn around and collect $120,000 from the buyer, and pocket the difference less related fees and expenses. These are called Real Estate Options and those in the know are using this very technique to amass fortunes. But did you also know that this technique can be done with almost anything you can buy and sell?

How much would you have to pay for an option like the one above? If it gave you the exclusive right to buy at $100,000 for three months for example, it could cost you around $1,000. Now if you did this and found a buyer willing to pay you $120,000, and then paid all the related expenses, you could walk away with $10,000 or half the $20,000 difference. To you that's a return of $10,000 on only a $1,000 investment in only 3 months or 1,000%. Annualized that's 4,000%.

That's exactly how it works with options on futures contracts. You spot a "sleeper" market, pay a premium to lock the price at anything you agree on beforehand, and then wait for the underlying futures price to move, hopefully in your favour. It's even better using options contracts with futures because there is almost never a problem finding a buyer: Options on futures are amazingly liquid! Like options in real estate, if the price turns out not to move in your favor, you are not obligated to purchase the property or commodity. And even though that carries the risk of losing what you paid for the option, you are guaranteed never to lose more than that amount - or $1,000 in our example above.

Because options on futures are so liquid, most are bought and sold as an investment in their own right and not exercised. This is why an entire parallel market in options trading has grown up. Here is where you'll find potentially one of the most powerful investment vehicles known to man.

Brad Sherwood is a student of Ken Roberts.

Article Source: http://EzineArticles.com/?expert=Brad_Sherwood

Markets closed

2010-02-15T03:37:00.001-08:00

US markets are closed today in observation of Presidents' Day.

Wealth & Income

2010-02-14T11:19:00.000-08:00

I recently re-read The Millionaire Next Door. Almost forgot how profound and "potentially" life changing that book can be...here's a quote from Thomas Stanley that pulls-no-punches;

"Most people have it all wrong about wealth in America. Wealth is not the same as income. If you make a good income each year and spend it all, you are not getting wealthier. You are just living high. Wealth is what you accumulate, not what you spend."

~ Thomas Stanley, Ph.D., and William Danko, The Millionaire Next Door

To your ever-expanding wealth! Scott

Starting a Commodity Futures Trading Club

2010-02-10T18:46:00.000-08:00

By Shawna Jones

Once you have learned how easy it can be to make money in the commodity futures markets, you’ll want to share it with others; but how?

Here are some great ways to have fun introducing commodity futures trading to friends, family and colleagues…

1. Plan a Game Night with a group of friends. Instead of just any old game play the game PIT by Parker Bros. This game has been around since 1904! It is a fast pace card game that replicates the nonstop action of an actual trading floor. Buy and Sell commodities in the comfort of your own living room. (The person that ends the evening cornering the market has to host the next PIT game night.)

2. Monday Money Movie Night~ One Monday a month, (when there’s no football of course) have friends and family over for a Money Movie Night. Pick a movie from our Trader Resources page or one of your own. After the show discuss the different aspects of the movie and analyze how money in the movie was made. This will lend to further understanding of making money in the markets.

3. Money Morning Breakfast Club~ Share a morning a month with friends and discuss current trades, market conditions, and future market trends.

4. Making Money Book Club~ meet with others and discuss a current trading book the club is focused on. Refer to our wonderful list of books on the Trader Resources webpage. (Hint: see the featured Book of the Month)

5. Commodity Pot Luck~ where you assign each person a dish that focuses on a particular commodity (see Commodity Recipes page for further food ideas). Then when your guests arrive place a 5x7 card by the dish explaining a trading fact, such as:

Frozen Concentrated Orange Juice [FCOJ] – refers to
the juice solids derived from Florida oranges only.
Currently trading in multi-year lows and is progressing
into its seasonal tendency to trend UP (long) in price.

6. Charity Organization~ everyone is interested in helping others, especially during this current economic down turn. Gather together a group of people who want to do more than bake cookies and wash cars. Have each member donate a set amount of seed money, (maybe make it interesting and have people donate to the kitty if they wear a certain color to the meetings that has randomly been picked out of a hat.) Open a trading account, invest in the commodity futures markets utilizing the techniques taught in ChartSmith-Forging your Financial Future, and start making some serious money for a worthy cause.

7. The Power of Women~ Women in the commodity futures trading arena are, well, a rare commodity. Why? Hard to say. Most feel they don’t possess the killer instincts. Don’t get me wrong, there are successful, female traders, just not many of them. It’s time to change all that. Start an all women’s Commodity Futures Club Today! Visit with the girls, drink lattes, and make bunches of money—it doesn’t get any better than that!

8. Real Men & Money~ there are two kinds of men; those that talk about sports and those who talk about money. Thankfully I’m married to the latter. Guys who like to talk about money usually like to hang out with other guys who like to talk about money. This one is a no brainer.

Getting together with others who have a common interest in commodity futures trading or any other type of money making investment; helps you to further understand the world of investing. Have fun with it, after all making money shouldn’t be scary and is a lot more interesting when we share it with the ones we care about.

Have other ideas for commodity futures investing clubs? Want Scott and Shawna Jones, investors and authors of the book ChartSmith—Forging your Financial Future to speak at your club’s next get together? Contact us Today!

Technical vs Fundamental

2010-02-07T20:02:00.000-08:00

At MyChartSmith.com we have included fundamental news and information on various commodities. When it comes to actual trading decisions our decisions are primarily based on technical chart data.

Here's some thoughts on technical vs fundamental...

Charts give us the up-to-the-day information needed for making actual trading decisions. Each day's trading range has incapsulated the opinion and emotion of the world's trading clientel--taking into consideration supply & demand issues and concerns, the vote has been cast and the open-high-low-and close tell the story without human emotion. The prices represented on the chart are what they are, plain and simple, and based on specific factors as described in ChartSmith-Forging Your Financial Future, we can create trading plans that place the odds of success greatly in our favor while simultaneously reducing risk. That's the way we like it.

Get the ‘Beginners Guide to Futures Trading’ – FREE eBook!

As for fundamental information, many of you have heard me call it "funny-mentals". The credit for that term goes to Mr. Ed Seykota of South Lake Tahoe. Funnymentals is a great description because this type of market information includes mostly ambitious opinions and emotionally driven sensationalized thoughts and ideas with sprinkles of factual data. Obviously this makes for a tough combination when trying to make sound trading decisions, not to mention attempting to stay committed to one's decisions. Like the legendary trader, Ted Warren, said in his book, How to Make the Stock Market Make Money for You, "...the trader (speculator) begins to run at the sight of his own shadow..."

Funnymentals are a part of the investing marketplace that Shawna and I find interesting and fun. This is why we love to include tidbits of recent news items along the way, keeping in mind that the fundamentals are more for entertainment than anything else.

Technical vs fundamental; now you know that we likem' both, but for two distinctly different reasons.

To your ongoing success (and fun!), Scott

A few thoughts for the "kickoff" to 2010

2010-02-07T08:38:00.000-08:00

Recently we have had some time to nestle in with the family and watch some great NFL football games. With the playoffs coming to an end and the Super Bowl fast approaching there has been some fun conversations in our home revolving around the exciting game of football.

All of this activity has gotten me pondering some of the lessons I can remember from my football days while at Yosemite Union High School in the quaint little mountain town of Oakhurst, CA. While playing ball at Yosemite High these lessons seemed only to apply to the game we were playing at the time but for me and my fellow teammates the wisdom our coach was imparting to us on the field was important "life lessons" that could be carried throughout our lives on and off the field. Many of these lessons on the field have influenced the way I approach commodity futures trading as well.

Here's a few thoughts I gleaned from our team's head coach, Steve Raupp, that hopefully will get all of us well on our way to a positive and confident start as we begin to "kick-off" this amazing year before us.

Practice to win- don't just go through the motions, think of every practice as "the real deal". This is the time to be in the present moment, totally focused on perfecting the skills that will ultimately bring us the result we're looking to achieve as a team on game day. (Analogous of paper trading the commodity chart formations?)

Conditioning- Coach Raupp said, "our opponents may be larger than us or possess more skill than us but one thing is for sure; they will not be able to match our physical agililty!" We trained harder and pushed each other to be as conditioned as any team could be, believing that anything we lacked could eventually be overcome by massive effort.

Take Ownership- the message we were receiving from our coach and the coaching staff was that we had to take ownership of every action, every play on the field, including the bad ones. As individual members of a unitized team we had to mentally take ownership of that field before we ever stepped onto it for the Friday night game. This mindset took away our tendencies to make excuses or place blame because we understood that whatever our team's objective, it was ultimately our responsibility to see it through. To be continued...

"kickoff" continued...

2010-02-07T08:36:00.000-08:00

Rookies Never Last- when called a rooky there's a couple of things a player can do. He can fold under the pressure and allow the humiliation to tear him down emotionally, eventually to be seen leaving the game or the rooky can gather his intestinal fortitude, determination, and willpower to learn what needs to be learned and drive himself forward, never to be thought of as a rooky again.

Sell Out- I can still here Coach Raupp saying, "If you're out here on the field trying to survive then you can pack it in to the locker room and hang up your gear! I need every one of you to give your team what it deserves, I need you to sell out!" This was a call to both emotional & physical action, to "leave-it-all-on-the-field". There was no talk allowed by the coaching staff that had even a hint of half hearted, willy-nilly, maybe-we'll-just-get-by attitude in it. It was all or nothing and "sell out" became a core belief amongst the team.

Review- monday afternoon practices often began in a classroom with the team and coaching staff reviewing Friday night's game on film. This wasn't loafing time, it was serious review of the plays we had executed effectively. This also included a hard look at what we had done wrong, and what could be done to take corrective action when we were back on the field. Reviewing film was a time for self assessment and honesty from each of us, a time when we had to swallow pride in order to recognize what had to be fully learned from the experience. That's what made the experience on the field valuable--because we were determined to learn from it!

This is but a small number of examples I've learned from Coach Raupp and the game of football but I think that is one of the reasons I enjoy watching an occasional game because there is so many analogies that can be drawn from the activity on the field to that of my daily life.

From commitment to family to persistence at work to building our dreams with passion and maintaining the patience to recognize that it's all a process...caring, sharing, loving, and the business of overall living requires the development of attributes that correlate in many ways to those we see in the players on the 100 yard playing field.

Some people say it's just a game, but really, isn't that what life is in a way, a game? I like to think of life as the greatest game of all offering each of us opportunities to learn and grow, if we'll only take the time to see them.

I hope you will consider and create life enhancing analogies from the positive experiences in your own life and "kick-off" 2010 with renewed resolve and enthusiasm for your bright future!

Our best to you, Scott

*During my senior year Coach Raupp and his assistant coaching staff lead our team to victory as we became the North Sequoia Division champions for the first time in our school's history. The year was 1985.